Pricing and Valuation of Options

Which component represents the value of an option if it were exercised immediately?

For a Call option, how is the intrinsic value calculated?

Calculate the intrinsic value of a Call option where the Spot price is 150 and the Strike price is 130.

If a Put option has a Strike Price of 50 and the underlying Spot Price is 55, what is its intrinsic value?

What is the relationship between Option Premium, Intrinsic Value, and Time Value?

A Call option has a Premium of 12, a Strike of 100, and a Spot price of 108. What is the Time Value?

When is a Call option considered 'In-the-money'?

When is a Put option considered 'Out-of-the-money'?

What happens to the price of a Call option if the volatility of the underlying asset increases?

How does an increase in the Risk-Free Rate (RFR) affect the value of a Put option?

What is the impact of an increase in the Strike Price on a Call option's value?

Consider a Put option with Strike = 200 and Spot = 180. The premium is 25. What is the Intrinsic Value?

If a Call option is At-the-money (ATM), what is its intrinsic value?

Which factor generally increases the value of both Call and Put options?

What is the effect of dividend payments on a Call option?

For a European Put option, under what condition can the Time Value be negative?

Calculate the Intrinsic Value for a Call if Spot = 50 and Strike = 60.

If Spot = 100, Strike = 90, and Call Premium = 15, is the option ITM, ATM, or OTM?

Which of the following describes the 'Time Value' of an option?

If a Call option has a premium of 5 and an intrinsic value of 0, what can be inferred?

How does Time to Maturity generally affect the value of a Call option?

A Put option has a Strike of 80 and a Premium of 2. The Spot price is 82. What is the Intrinsic Value?

If a Put option is ITM, which relationship holds true?

What is the Time Value of an option that is expiring today?

Which factor has an inverse (negative) relationship with the value of a Put option?

If the Spot Price is 100 and the Strike Price is 100, the option is classified as:

Calculate the Time Value if: Spot = 40, Strike = 35, Call Premium = 7.

What is the Intrinsic Value of a Put option with Spot = 200 and Strike = 150?

Which of the following increases the value of a Put option?

If a Call option is deeply Out-of-the-money, its Delta (sensitivity to price changes) is low. What is its Intrinsic Value?

The price of the option is also referred to as the:

Calculate the Intrinsic Value: Put Option, Spot = 90, Strike = 100.

What happens to the value of a Call option if the company declares a higher-than-expected dividend?

For a Call option, Intrinsic Value is typically:

Which option has an Intrinsic Value of zero?

If Spot = 60, Strike = 50, Call Premium = 12. What portion is Time Value?

Why might a deep ITM European Put have negative time value?

Identify the incorrect statement regarding option factors.

Which pair of factors has a positive correlation with Call Option value?

If a Call option is ITM (Spot 100, Strike 90), its Intrinsic Value is:

What is the lower bound for the price of an option (assuming non-negative premiums)?

A Put option is ATM. If the Spot price decreases, the option becomes:

How does an increase in dividends affect a Put option?

In the context of options, 'Exercise Value' is synonymous with:

If Spot = 100, Strike = 110, Call Premium = 5. What is the Intrinsic Value?

If Spot = 100, Strike = 110, Put Premium = 15. What is the Intrinsic Value?

Generally, for European options, increasing the time to maturity:

Which option is 'Out-of-the-money' if Spot = 50 and Strike = 45?

What happens to a Call option's value if the Risk-Free Rate decreases?

If a Put option has Intrinsic Value = 0 and Premium = 0, what is likely true?